Chinese steel prices start 2007 with strong gains

Chinese steel spot prices have taken off at the start of 2007, especially for hot-rolled coil. Hot-rolled coil spot prices rose to $449/t ex-Vat, up 2.9% WoW and 7.3% MoM. The reasons for such a strong recovery in domestic prices appear to be high exports and low domestic stocks, following a sustained period of destocking. There are also signs of a recovery in domestic steel demand after a period of weakness last year.

One of the things that’s ticked me off for a while now is the uneven way tarrifs are applied. Steel is tarrifed if it comes from China, but finished goods made from steel are not, so our direct customers can circumvent us and our entire supply chain by buying finished goods from China.

And with Chinese steel about 25% below North American steel, my customers could get finished parts recently for less than my raw material costs.